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Canadian Securities Course (CSC) Practice Exam · Question

Which strategy involves simultaneously buying a put option and selling a call option on the same underlying asset with the same strike price and expiry date?

A straddle involves buying (or selling) both a call and a put option with the same strike price and expiration date on the same underlying asset, anticipating h

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Question: Which strategy involves simultaneously buying a put option and selling a call option on the same underlying asset with the same strike price and expiry date?

Answer options:

  • Strangle ✅ Straddle
  • Collar
  • Butterfly spread

Correct answer: Straddle

Explanation: A straddle involves buying (or selling) both a call and a put option with the same strike price and expiration date on the same underlying asset, anticipating high (or low) volatility.

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